MSTC Current Financial Leverage

MSTCLTD -  India Stock  

INR 475.75  41.25  7.98%

MSTC's financial leverage is the degree to which the firm utilizes its fixed-income securities and uses equity to finance projects. Companies with high leverage are usually considered to be at financial risk. MSTC's financial risk is the risk to MSTC stockholders that is caused by an increase in debt. In other words, with a high degree of financial leverage come high-interest payments, which usually reduce Earnings Per Share (EPS).
Additionally, see the analysis of MSTC Fundamentals Over Time.

MSTC Bonds 

 
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Given the importance of MSTC's capital structure, the first step in the capital decision process is for the management of MSTC to decide how much external capital it will need to raise to operate in a sustainable way. Once the amount of financing is determined, management needs to examine the financial markets to determine the terms in which the company can boost capital. This move is crucial to the process because the market environment may reduce the ability of MSTC LIMITED to issue bonds at a reasonable cost.

MSTC Financial Leverage Rating

MSTC LIMITED bond ratings play a critical role in determining how much MSTC have to pay to access credit markets, i.e., the amount of interest on their issued debt. The threshold between investment-grade and speculative-grade ratings has important market implications for MSTC's borrowing costs.
Overall Bond Rating
Not Rated
Average S&P Rating
N/A

MSTC LIMITED Debt to Cash Allocation

As MSTC LIMITED follows its natural business cycle, the capital allocation decisions will not magically go away. MSTC's decision-makers have to determine if most of the cash flows will be poured back into or reinvested in the business, reserved for other projects beyond operational needs, or paid back to stakeholders and investors. Many companies eventually find out that there is only so much market out there to be conquered, and adding the next product or service is only half as profitable per unit as their current endeavors. Eventually, the company will reach a point where cash flows are strong, and extra cash is available but not fully utilized. In this case, the company may start buying back its stock from the public or issue more dividends.
The company has accumulated 1.54 B in total debt with debt to equity ratio (D/E) of 0.28, which may suggest the company is not taking enough advantage from borrowing. MSTC LIMITED has a current ratio of 1.05, suggesting that it may not be capable to disburse its financial obligations in time and when they become due.

MSTC Assets Financed by Debt

Typically, companies with high debt-to-asset ratios are said to be highly leveraged. The higher the ratio, the greater risk will be associated with the MSTC's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of MSTC, which in turn will lower the firm's financial flexibility. Like all other financial ratios, a a MSTC debt ratio should be compared their industry average or other competing firms.

Understaning MSTC Use of Financial Leverage

MSTC financial leverage ratio helps in determining the effect of debt on the overall profitability of the company. It measures MSTC's total debt position, including all of outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of MSTC assets, the company is considered highly leveraged. Understanding the composition and structure of overall MSTC debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business and if it is worth investing in it.
Please read more on our technical analysis page.
MSTC Limited engages in marketing, e-commerce, other, and scrap recovery and allied job businesses in India. MSTC Limited was founded in 1964 and is headquartered in Kolkata, India. MSTC is traded on National Stock Exchange of India in India.

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Additionally, see the analysis of MSTC Fundamentals Over Time. Note that the MSTC LIMITED information on this page should be used as a complementary analysis to other MSTC's statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..

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When running MSTC LIMITED price analysis, check to measure MSTC's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy MSTC is operating at the current time. Most of MSTC's value examination focuses on studying past and present price action to predict the probability of MSTC's future price movements. You can analyze the entity against its peers and financial market as a whole to determine factors that move MSTC's price. Additionally, you may evaluate how the addition of MSTC to your portfolios can decrease your overall portfolio volatility.
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